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Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
Call 4 t13_eng_20140224
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Call 4 t13_eng_20140224

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  • 1. 4Q13 Conference Call February, 24th 2014 1
  • 2.  4Q13 and 2013 Highlights  Operational Performance  Financial Performance  2014 Expectations 2
  • 3. 4Q13 and 2013 Highlights Operational Performance  20% YoY increase in gross sales in 4Q13 to R$2.9 billion • Same-store-sales: 19.0% increase versus 4Q12 (SSS of 16.0% at bricks and mortars stores and of 39.3% in e-commerce in 4Q13) • Tough basis of comparsion (SSS of 10.2% at bricks and mortars stores and 25,0% in e-commerce) • 4 new store openings (1 in São Paulo, 1 in Paraíba, 1 in Ceará e 1 in Alagoas) • In 2013, Magazine Luiza opened 17 stores and closed 16 stores, ending the year with 744 stores  On a comparable basis, gross margin of 28.2% in 4Q13 (+0,2 bp versus 4Q12), improvement due to: • Increase in gross margin in Northeastern stores • Stable gross margin in the rest of the company • INSS accounting effect had a negative impact of 0.6 bps on gross margin in 4Q13 • Significant reduction in SG&A expenses (on comparable basis) • Reduction of 3.0 bps from 24.9% in 4Q12 to 21.9% in 4Q13 • INSS accounting effect of 0.9 bps – SG&A expenses to 22.8% in 4Q13  Equity income: record results and profitability at Luizacred • Higher gross margin, default rates and reduction in operating expenses • Increase in EBITDA margin to 15.4% in 4Q13 (12.0% in 4Q12) • Increase in net margin to 9.1% in 4Q13 versus 6.2% in 4Q12 (ROE of 32.4% in 4Q13 and 22.0% in 2013) Profitability  Consolidated recurring EBITDA of R$131.8 million in 4Q13, with EBITDA margin of 5.3% (6.2% without PSP) • Increase in consolidated recurring EBITDA in 37.8% in 2013 to R$411.6 million, margem of 5.1% (5.4% without PSP) • Gross sales rose by 14.6% compared with operating expenses increase of 6.7% (without PSP) in 2013  Consolidated recurring net income of R$33.0 million in 4Q13, with net margin of 1.3% (or 1.9% without PSP) • Record consolidated net income of R$113.8 milhões in 2013, or R$70.7 million adjusted for extraordinary itens 3
  • 4.  4Q13 and 2013 Highlights  Operational Performance  Financial Performance  2014 Expectations 4
  • 5. Operational Performance – Stores Investments Number of Stores 175 R$ million # stores + 1 Store 743 106 1 731 106 733 1 106 1 740 1 107 744 107 626 624 632 1 45 636 2 4Q12 1Q13 2Q13 Conventional Stores 3Q13 Virtual Store 4Q13 Site Same-Store Sales Growth 16.0% 25 7 25 8 10 2 10.5% 9 11 14 5 4Q13 4Q12 New Store Remodeling 12.9% 14.6% 12M13 Same-Stores Sales Growth (Physical Stores) Same-Stores Sales Growth (includes e-commerce) Total Retail Growth 39 43 21 25 13 12M12 12M13 TI Logistics Others Average Age - Stores 1 to 2 years 67 More than 4 years 4Q13 42 Up to 1 year 17 19.0% 20.1% 25 63 52 636 146 23 456 55 2 to 3 years 149 3 to 4 years 288 stores (38.7%) up to 4 years 5
  • 6. Operational Performance –– Luizacred Financed Mix Sales % of total sales 100% 30% Luizacred Revenue R$ million 13.9% 100% 30% 2,711 2,381 39 402 29 419 478 431 34% 35% 19% 18% 17% 17% 4Q12 4Q13 Luiza Card CDC Third-Party Credit Cards Cash Sales/Down Payment 1,509 4Q12 Luiza Card – Outside of Luiza Stores Luiza Card – Inside of Luiza Stores 1,785 4Q13 CDC Personal Loans 6
  • 7. Operational Performance – Portfolio Composition Luiza Card – Total Credit Card Base # million Portfolio R$ million 12.9% 3.9 3.8 3,650 3.6 3.5 3.4 91 946 2,614 4Q12 1Q13 2Q13 3Q13 4Q13 4,122 59 4Q12 Credit Card CDC 1,158 2,904 4Q13 Personal Loans 7
  • 8. Luizacred Portfolio Comments Overdue Payments % of portfolio 12.4  Provision for Loan Losses (PLL) over total sales: reduction from 51.8% in 4Q12 to 46.6% in 4Q13 12.7 11.6 10.4 8.7 10.0 11.3 11.2 8.2  PLL over total portfolio: decrease from 4.0% in 4Q12 to 3.4% in 4Q13  Short-term NPL: improvement of 0.1 bp versus 4Q12 4.4 dec/11 114% 4.7 4.3 4.0 4.5 3.3 4.1 3.2 3.2 mar/12 jun/12 sep/12 dec/12 mar/13 jun/13 sep/13 dec/13 111% 117% 129% 153% 147% 126% 117% 118% Overdue 15-90 days  Short-term delay in minor historical levels, reflecting the trend of improvement in indicators of default  Maintained overall conservative approach to credit analysis and approval Overdue above 90 days Coverage Ratio (%) 8
  • 9.  4Q13 and 2013 Highlights  Operational Performance  Financial Performance  2014 Expectations 9
  • 10. Gross Revenue and Net Revenue Gross Revenue - Internet Gross Revenue - Consolidated R$ billion R$ million 7.0% 11.2% 18.9% 20.0% 21.1% 14.6% 13.3% 36.4% 39.3% 28.2% 1,403 1,095 2.9 2.5 2.0 2.4 8.5 2.0 314 1Q12 2Q12 3Q12 4Q12 12M12 1Q13 2Q13 3Q13 4Q13 12M13 301 1Q12 2Q12 3Q12 4Q12 12M12 1Q13 2Q13 3Q13 4Q13 12M13 Net Revenue - Consolidated Comments R$ billion 6.0% 10.1% 298 264 248 2.1 2.0 367 269 9.7 2.2 437 18.8% 21.1% 14.5%  Consolidated gross sales: rise of 20.0% YoY in 4Q13 • 1.7 1.7 • Tough basis of comparisson (SSS of 10.2% in bricks and mortars and of 25.0% in e-commerce) 2.5 2.0 1.7 19.0% increase in SSS, highest growth rate of the last two years (SSS of 16.0% in bricks and mortars and of 39.3% in e-commerce in 4Q13) 2.0 7.1 8.1 1.8 1.8  Increase of 14.6% in consolidated gross sales in 2013 1Q12 2Q12 3Q12 4Q12 12M12 1Q13 2Q13 3Q13 4Q13 12M13 Growth over the same period of 2012 10
  • 11. Gross Profit Comments Consolidated Gross Profit R$ million  On a comparable basis, gross margin of 28.2% in 4Q13 (+0,2 bp versus 4Q12) 7.7% 7.2% 15.6% 18.1% 12.6% 2,009 678 574 • Improved product mix With the INSS tax accounting effect, gross margin would have been contábil 0.6 bp lower versus 4Q12 • 498 463 1Q12 2Q12 3Q12 4Q12 12M12 1Q13 2Q13 3Q13 4Q13 12M13 29.1% Kept gross margin stable elsewhere  On comparable basis, gross margin of 28.6% in 2013 (0.2 bps higher versus 2012) 514 477 28.9% • 572 495 27.8% Higher gross margin from Northeastern stores (integration completed) • 2,263 • 28.0% 28.4% 28.2% 28.3% 27.4% 28.0% 29.0% Growth over the same period of 2012 28.2% 29.1% 28.2% Including INSS tax accounting effect, gross margin would have decreased by 0.4 bp versus 2012 28.6% Gross Margin (%) Gross Margin excluding INSS tax (%) 11
  • 12. Operating Expenses and Others Expenses (Revenues) Operating Expenses R$ million  3.0 bps reduction versus 4Q12 4Q13 4Q12 0 8 11 506 396 Sales G&A -19.3% -5.5% PSP 0.0% Prov Others Total -0.4% 0.5% -24.7% 107 23 6 6 566 9 Sales G&A PSP -17.6% -4.3% -0.9% Prov Others Total 3 0 11 0 G&A expenses - 1.2bp lower versus 4Q12 (INSS tax accounting effect of 0.3bps) 8 2  Other operating expenses (revenues) -22.8% 0 0 Deferred revenues: recurring effect R$7.8 million in 4Q13 Provision for tax losses of R$1.5 million in 4Q13 • 0.2% • • -0.2% 4Q13 4Q12 6 Selling expenses – 1.8 bps lower versus 4Q12 (INSS accounting effect of 0.6bp) 436 Others Operating Expenses (Revenues) R$ million • • 113 Asset Sale Comments % Net Revenue There were no extraordinary expenses in 4Q13 6 -1 Booking of Provisions One-off Deferred for Tax Expenses Revenue Others Total Asset Sale Booking of Provisions One-off Deferred for Tax Expenses Revenue Others Total 12
  • 13. Equity Income Equity Income Comments R$ million  Equity income • 0.7% 0.8% Positively impacted by strong performance at Luizacred 4Q12 0.3% • Lower operating expenses and provisions for loan losses • Increase in EBITDA margin to 15.4% in 4Q13 (12.0% in 4Q12) • 13.4 19.5 Increase in net margin to 9.1% in 4Q13 (6.2% in 4Q12) 4Q13 0.7% 54.5  In 2013, Luizacred reported record EBITDA and earnings • 18.0 12M12 Net income of R$89.2 million, ROE of 22.0%. 12M13 % Net Revenue 13
  • 14. EBITDA and Adjusted EBITDA EBITDA Comments R$ million 132 477 122 81 259 • 160 74 81 63 23 1Q12 2Q12 3Q12 4Q12 12M12 1Q13 2Q13 3Q13 4Q13 12M13 1.4% 4.9% 4.4% 4.0% 8.8% 6.1% 5.3% 3.7% 3.6%  Increase in EBITDA margin of 1.3 bps versus 4Q12 (5.3% in 4Q13). 5.9% Without PSP, margin would have reached 6.2% in 4Q13 versus 4.0% in 4Q12  Positive impact from: i) double-digit-top-linegrowth; ii) expense dilution and iii) strong equity income  Recurring EBITDA margin of 5.1% in 2013 (5.4% without PSP) Adjusted EBITDA R$ million 4Q12 4.1% 4.0% 4Q13 5.3% 5.3% 132 81 0 0 3 0 One-off Costs One-off Revenues One-off Expenses Adjusted Deferred Revenue Adjusted EBITDA 0 0 0 132 EBITDA One-off Costs One-off Revenues One-off Expenses Adjusted Deferred Revenue Adjusted EBITDA 84 EBITDA 0 Margin EBITDA (%) 14
  • 15. EBITDA (on comparable basis) 4Q12 x 4Q13 % net revenue 0.9% 0.1% 0.1% 1.2% 4.0% EBITDA 4Q12 6.2% 0.3% 5.3% 0.9% 0.2% Margin Sales G&A PDD Equity Income Others 0.4% EBITDA w/o PSP 5.4% PSP EBITDA 4Q13 2012 x 2013 0.7% 3.7% EBITDA 2012 0.3% 0.1% 5.9% 0.3% 0.2% Margin 0.8% Sales G&A PDD Equity Income EBITDA w/o PSP PSP Extra Gain EBITDA 2013 Note.: excluding the impact of the social security tax reclassification 15
  • 16. Consolidated Financial Expenses Adjusted Financial Expenses Comments R$ million  Adjusted financial income • -2.2% 44.6 Increase of 0.5 bp versus 4Q12 -2.7%  Lower working capital needs 67.4  Better debt profile compensated higher interest rates in the period 4Q12 4Q13 -2.7% • -2.7% 193.2 12M12 In 2013, adjusted financial results were stable at 2.7% of net sales 221.6 12M13 % Net Revenue 16
  • 17. Net Income and Adjusted Net Income Net Income Comments 33.0 113.8 R$ million 54.7 25.4  Record net income • R$48.0 million with net margin of 1.9% in 4Q13 (without PSP), 4x higher YoY 0.8 40.7 21.9 2.3 9.7 • Recurring net income of R$33.0 million, about 2x higher than 4Q12 6.7 • In 2013, earnings of R$113.8 million with margin of 1.4%, reversing losses of R$6,7 million in 2012 1Q12 2Q12 3Q12 4Q12 12M12 1Q13 2Q13 3Q13 4Q13 12M13 -2.4% 1.3% 0.1% 0.5% -0.1% 0.0% 3.0% 1.3% 1.3% 1.4% Adjusted Net Income R$ million 4Q12 4Q13 0.2% 0.1% 1.3% 33.0 9.7 3.0 0 1.0 Net One-off One-off One-off Income Ops. Results Fin. Results Taxes 0 Tax Credits 1.3% 0 0 0 0 33.0 Tax Credits Adjusted Income 11.7 Adjusted Income Net One-off One-off One-off Income Ops. Results Fin. Results Taxes Net Margin (%) 17
  • 18. Working Capital and Net Debt Working Capital % gross revenue 12.0% 13.2% 13.6% 14.0% Working Capital Discounted Receivables 13.3%  Improvements in inventory turnover 9.8% 10.3% 10.8% 2.6% 3.4% 3.4% 3.3% dec/12 mar/13 jun/13 sep/13 9.4% 12.2% 1.0% dec/13 Net Debt Net Debt Net Debt/EBITDA R$ million 2.6x 2.3x 2.1x 1.9x 1.3x 691 792 dec/12 mar/13 680 701 jun/13 sep/13  R$142 million in reduction of net income 549 dec/13 18
  • 19. ADJUSTED CASH FLOW STATEMENT CASH FLOW R$ million 545 772 Initial Cash Final Cash 412 211 229 146 226 12 346 101 Operational Flow Sale of assets Capex Época 20 Interest Repurchased Captures Payments Cash Flow Note.: the only difference between the Cash Flow Statement and the Adjusted Cash Flow Statement is the treatment of securities as cash equivalents. 19
  • 20.  4Q13 and 2013 Highlights  Operational Performance  Financial Performance  2014 Expectations 20
  • 21. 2014 Expectations Sales performance  To continue to grow e-commerce sales above industry average and to grow double-digit bricks and mortars SSS • World Soccer Cup should boost sales of TVs • Federal Government housing program – Minha Casa Minha Vida – should also contribute to sales performance Stable gross margin     Continue to improve gross margin in our Northeastern stores Maintain gross margin stable elsewhere Pricing Project – to be more effective in our pricing per channel, category and region Continue to improve sales mixc so to make up for greater contribution from e-commerce and TV sales in our 1H14 performance EBITDA margin expansion  Adittional gains are expected owing to consolidation of projects that have been mapped out in 2012 and 2013 and are going to be fully executed in 2014 • Store maturation process • Reduction in delivery and logistics costs (Multi-channel delivery project underway) • To improve operational efficiency at Luizacred 21
  • 22. Investor Relations ri@magazineluiza.com.br www.magazineluiza.com.br/ir Legal Disclaimer Any statement made in this presentation referring to the Company’s business outlook. projections and financial and operating goals represent beliefs. expectations about the future of the business. as well as assumptions of Magazine Luiza’s management and are solely based on information currently available to the Company. Future considerations are not a guarantee of performance. These involve risks. uncertainties and assumptions since they refer to forward-looking events and. therefore depend on circumstances that may not occur. These forward-looking statements depend substantially on the approvals and other necessary procedures for the projects. market conditions. and performance of the Brazilian economy. the sector and international markets and hence are subject to change without prior notice. Thus. it is important to understand that such changes in conditions. as well as other operating factors may affect the Company’s future results and lead to outcomes that may be materially different from those expressed in such future considerations. This presentation also includes accounting data and non-accounting data such as operating. pro forma financial data and projections based on the Management’s expectations. Non-accounting data has not been reviewed by the Company’s independent auditors. 22
  • 23. 4Q13 Conference Call February, 24th 2014 23

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